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Splitting up Rental Properties During a Divorce- Information for Southern California Landlords

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Splitting up Rental Properties During a Divorce- Information for Southern California Landlords

If you (or your spouse) are a landlord who has assets in the form of rental properties and you are facing a divorce, you are no doubt searching for information on if or how your properties will be divided during a dissolution of your marriage. Although every situation is different, we can state some general principles that will apply, based on when the properties were acquired and whether they are self-sustaining.

  • The properties were owned before the marriage and have been self-sustaining during the marriage.
    • Typically, these properties would remain with their original owner and would not be subject to division during a divorce.
  • The properties were owned before the marriage but community income or assets were used to sustain or renovate the properties.
    • In this case, the spouse who does not own the properties would typically be entitled to some sort of reimbursement for the community assets that were used for the rental properties during the marriage. The Moore/Marsden formula is used to calculate what reimbursement is owed to the community. This formula allows the community to acquire a proportional interest in the separate property by reimbursing the community for any actual community pay down of loan principal plus apportioning to the community a pro rata share of the equity increase in the property.
  • The properties were purchased during the marriage with community assets.
    • In this case, the properties would typically be divided 50/50 during a dissolution.

Impact of Covid-19 Eviction moratorium on Landlords Facing Divorce

The pandemic eviction moratorium (recently declared unconstitutional by the Supreme Court) is going have a major impact on some landlords who are divorcing. Since many tenants stopped paying rent during the moratorium, countless properties that were once self-sustaining became liabilities. It’s likely that many landlords had to use community assets to pay for mortgages or repairs during this period where many stopped receiving rent payments. If this was the case, the spouse who shares the community pot of assets will likely be compensated in the dissolution order.

 Do you need help protecting your rental properties or getting your share of the assets during a divorce?

Call our office today at 949-889-1227. We specialize in helping high income clients who have complex assets that need protection during a divorce, as well as cases complicated by narcissism, bipolar disorder and other mental illnesses. John A. Bledsoe is Orange County’s premier divorce attorney and a certified family law specialist. Our firm offers a confidential initial case evaluation.  to learn more.

Content note: This blog is made available by the law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney-client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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